French insurance giant Axa has announced plans to abandon the UK life and savings market as it looks to refocus its business, and sell its platform business to Standard Life.
Axa has confirmed it is engaged in discussions for the sale of its remaining UK life and savings assets, namely its direct protection business SunLife and its non-platform investment and pension business.
However, the French insurer said today (4 May) there is “no certainty” these discussions will result in these transactions being completed.
The announcement comes as news emerged yesterday (3 May) Standard Life had reached an agreement to buy Axa’s entire issued share capital of Axa’s Portfolio Services, the company trading as Elevate.
The move, which is subject to regulatory approval, will add £9.8bn in assets under management to the Standard Life platform and bring the total assets under administration to £36.4bn.
It will be funded from the company’s existing cash resources.
David Tiller, head of adviser and wealth manager propositions at Standard Life, said: “The acquisition demonstrates to advisers that, as the market consolidates, supporting their businesses and meeting the evolving needs of their clients is central to the long-term strategy of Standard Life.
Architas, which is Axa’s UK property & casualty, health and asset management division, is not included in the scope of the five-year strategic review.
Commenting on the proposed sell-off of its life and savings businesses, Paul Evans, Axa UK chief executive, said: “After detailed consideration, we have come to the conclusion that these businesses could be even more successful if supported by organisations with a stronger strategic focus on the life and savings segment.
“These transactions would allow Axa to rebalance the focus of its UK activities towards property & casualty, health and asset management.”
Dan Farrow, director of Chelmsford-based SBN Wealth Management, said: “Axa have clearly lost the appetite to compete in the increasingly competitive UK market.
“Like most other platform providers, Standard Life don’t really spend enough on technology at the front end, so this is more about a grab for assets under management than anything else.
“I rarely use the Standard Life platform and never Axa, as from a cost perspective, Alliance Trust wins every time.”